Lessons Learned Transforming a Small Manufacturing

Company

Ways to Make Lean Work for You

Vivek E. Naik2012 Internat ional Conference on

LEAN & SIX SIGMA

“We will lose one of our largest customer if we don't ship this order on time”

S A I D T H E B U S I N E SS O W N E R

A Story of a Small Company

The Problem

Most of the customers were upset about the 20+ day long lead time.

Loosing this customer could mean a significant loss for the company

Current State On That Day

This company is a small Manufacturing company

Business had grown from small start to full-fledged manufacturing operations

The initial growth was handled by addition of more and more unskilled labor

They expedited orders when customers screamed for it

Did They try to improve the processes?

They just did not have time for itOften everyone was diverted to expedite one

order

Same thing happened that day They tried to get this one order out

within 3 days

But Something was different this time?

Stakes were high They could not afford to lose this customerIt made them wonder “Do we really don't have time to change the

way we operate”

The Result

They realized there was no option but to change in order to survive and grow

This was their“Burning Platform”

Our Platform is Burning but Where do We Go?

Click icon to add pictureChaotic shop floor

People were unaware of the Standard Process

Without Standard process it was impossible to get any Cycle Times

No proper location for parts

All this lead to lot waste

No Access to Needed Information

There was no data about production, Open orders, Quality, delivery

Production was not able to know: How many and what orders are open? Which orders are overdue? What needed to be shipped that day? Without this stake in the sand we were not sure where

to go

So what was the answer?

“Lean”

Someone suggested that Principles of Lean Manufacturing will provide the solution

So isn’t Lean only for big guys?

They believed that lean could not be applied in their case

But, in reality, Lean is better suited for smaller business and not necessarily manufacturing operations

Why Small is Good?

“It is easier to change the course of a boat than to move an iceberg” – Anonymous

Why Small is Good?

Bigger organizations have too much inertia even though they may have more resources at their disposal

A smaller organization, on the other hand, is much more flexible and responsive to change

Small organizations have few levels of management

This helps to avoid problems of miscommunication because the head and the tail are not very far away

Constraints of the Small Company

Small organization cannot spend millions or stop everything to start a formal program, but…….

“Is that Lean in true essence?”

What is Lean in True Essence?

Lean has to start organically within the organization

You don’t need experts to start lean though it may be helpful

You can learn lean principles by systematic and religious application of common sense

Everyone has to go through the journey to practice, Learn and apply lean in a way that is suitable to their unique process

What did they do?

They did not stop the lines to hold the events.They just did improvements when the lines

were down due to broken machine or delay in getting parts

They started small and thought big, from just one workstation to entire shop floor

They trained our people to solve their own problems

Their Achievement

They have tremendously improved their delivery from 20+ days to 97%+ of the orders shipping within 3 days

This is story which many people can relate to especially if you are in small manufacturing company

Success may vary from place to place We will explore the reason why and how to get

started using some of the lessons I learned working for small company

HOW CAN YOU MAKE LEAN WORK FOR YOU?

Lessons Learned Along the Way

LESSON 1

You Don't Need To Solve All Problems To Be Successful

The Assumptions

We need a roadmap to apply lean with every detail planned out from beginning to the end

We have to solve each and every problem that is out there

The thought of solving so many problems at once is over whelming and stops many before they even start

All Problems are Not the Same

Breaking the problems down and tackling only the important problems is necessary (80/20)

Don’t try to solve everybody’s problem yourself

Only Few need creative skill to solve

There is a big chunk of problems at the bottom of the pyramid

How do You Solve Such a Big Chunk of Problems at the Bottom of the Pyramid?

Train and empower all your people to solve their own problems

When you allow the people who run the process to also do the improvements, they own the change

This is helpful in sustaining the change Also the synergistic effect of everyone solving

the problems gives a tremendous momentum to your change process

What to Remember

Only few important problems need to be tackled to make a big impact. If you tackle the top 20% of issues, it will help you achieve 80% of the solution.

Problems are like a pyramid – there’s a huge base of simple problems which can be easily resolved and small set complicated problem which needs creative problem solving skills.

LESSON 2

Start By "Cleaning House" And Standardizing Processes

Clean Work Place Is Efficient and Safe

Having a place for everything, and getting rid of unnecessary tools and parts, makes it easy to find the necessary tools and parts

This helps you to work more efficientlyAnother advantage is that you immediately

know if anything is missing from its place

5S

The word 5S stands for Sort, Straighten, Sweep, Standardize and Sustain

5S could be a good starting point of any lean transformation and forms a catalyst for a culture of change

Due to the very visible results it makes the process of buy-in easy for both the shop floor personnel and management

Start with your own personal workplace

Do what you preach

Learn the process before teaching others

For everyone their workspace is special and most would not like to change it

It is humbling to realize how difficult it is to be changed than to change others

Choose the team of people who are most supportive to the change

Choosing the right people guarantees success and creating the right first impression

This initial team will help in promoting and spreading the things learned

Don’t make it a project

Allow things to be done during routine time

Do it in steps to allow people to get comfortable and stable in their new environment before moving to next step

What to Remember

Some of the key points of how 5S helps in laying down the foundation of Lean Transformation are:

• Standardization of process provides a stable base for incremental improvement• Visible results helps boost morale of the people

who then take pride working in the area• It is an enabler of “Continuous Improvement”

culture• Prepares the workplace and people for

implementing other Lean tools

LESSON 3

Motivation Gets You Started But Habit Keeps You Going

Why Sustaining Lean is Difficult?

Lean transformation works beautifully in the beginning but many fail in sustaining the efforts

This is not the fault of the people involved but the way traditional management works

Why Traditional Management Fail

Traditional management is results drivenIt is mostly concerned with the end result and

not the means to get thereThis leads malpractices like expediting

orders, over production, and excess inventory

Lean Management

Only by support and proper leadership/guidance you can drive your people to continuously improve the processes that add value to the customer.

The management system that helps you to achieve this is a Lean Management system.

Lean Management system uses various tools to connect the purpose (Providing value to customer) to the process and people.

Lean Management

Elements of Lean Management: Leader Standard Work

Leader Standard Work sustains the systems and integrates the changes made during the transformation process

Daily AccountabilityVisual Controls

Visual Control and Daily Accountability helps keep the process and people aligned to solve problems as they arise

Discipline    Discipline of the leader ensures that standard work is

followed and the whole system works coherently

From: “Creating Lean Culture” by David Mann

What to Remember

The elements of lean management, helps the leader to be accountable to the process by religiously following the “leader standard work” and discipline to the point they become a habit.

This change in habits is essential for mental transformation required in a lean manager

CONTINUING THE “CONTINUOUS IMPROVEMENT”

Continuing the Journey

Continuous Learning

Continuous learning is essential for continuous improvement

To learn we need to experiment We need to accept failures in our trials as means to

learn something newRaise the bar with every improvement. What was acceptable yesterday may be the focus for

improvement today and tomorrow may need further work again.

It cannot be “Continuous Improvement” if we stop doing it!

Wisdom

By three methods we may learn wisdom:

First, by reflection, which is noblest;

second, by imitation, which is easiest; and

third by experience, which is the bitterest.”  

– ConfuciusReflecting and knowing why is criticalCopying is easy but you cannot learn unless you try it yourself may be fail many times before you get it right

The End

ht t p : / / t w i t t e r. c o m /v i v ek na i k

Fo l l o w m y J o u r n e y a tM y Lean Trans fo rm at i o n B l o g

h t t p : / /v i v ek na i k .ne t

v i v ek na i k @v i v ek na i k .ne t